- 3 February 2020
- ECONOMIC BULLETIN - BOXIntegration of non-euro area central and eastern European EU countries in global value chains, export dynamics, and business cycle synchronisation with the euro areaEconomic Bulletin Issue 1, 2020Details
- This box reviews developments in non-euro area EU countries in central and eastern Europe with respect to trade integration and economic synchronisation with the euro area and investigates the potential exposure of their export dynamics to changing external conditions. The six economies are now an integral part of European production networks and net exports are a key driver of business cycle synchronisation with the euro area. In recent years, however, the business cycles of the six countries have somewhat decoupled from euro area economic activity. The potential drivers of this decoupling include robust domestic demand, lingering effects of past foreign direct investment in industry, the nature and final use of exports and the resilience of exports to countries outside the euro area. So far, the ongoing moderation in manufacturing, including in the automotive industry in Germany, and the escalation of trade tensions have been only partly reflected in the six economies.
- JEL Code
- E32 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Business Fluctuations, Cycles
F15 : International Economics→Trade→Economic Integration
- 25 March 2020
- ECONOMIC BULLETIN - BOXThe role of multinational taxation in the first reversal of foreign direct investment flows in the euro areaEconomic Bulletin Issue 2, 2020Details
- The US corporate tax reform that entered into force at the beginning of 2018 resulted in foreign direct investment flows reversing for the first time in the euro area. The episode is explained fully by developments in countries which are financial centres, where disinvestment operations were carried out via special purpose entities, initially through transactions in equities and later also in debt securities. Besides the bilateral flows with the United States, which were the first to be affected, foreign direct investment flows to and from offshore centres also reversed, reflecting the complex geographical structure of capital allocation by US multinational enterprises.
- JEL Code
- F32 : International Economics→International Finance→Current Account Adjustment, Short-Term Capital Movements
F38 : International Economics→International Finance→International Financial Policy: Financial Transactions Tax; Capital Controls